Redfin Corporation - RDFN STOCK NEWS

Redfin reports a significant 32% drop in pending U.S. home sales year-over-year as of January 1, marking the lowest level since 2015. The market is facing challenges including high mortgage rates over 6%, limited new listings, and ongoing recession fears. Despite the decline in sales, U.S. home prices have increased marginally by 0.5% year-over-year, though prices fell in 19 of the 50 largest metros. The typical U.S. home sold for $350,000, with mortgage applications down 12% from previous weeks.

In Q4, sellers offered concessions to buyers in 41.9% of home sales, a record high per Redfin. This is an increase from 31% a year prior and reflects changing market dynamics due to higher mortgage rates and economic uncertainty. The trend highlights increased buyer negotiating power as home sales decline. Phoenix experienced the largest jump, with concessions offered in 62.9% of transactions. Conversely, Austin saw a decrease in concessions from 38.1% to 33.3%. The overall data suggests a shift back to pre-pandemic pricing norms as seller expectations adjust.

The housing market is experiencing an unprecedented surge in supply, with homes for sale increasing by 18% year-over-year, the largest rise since 2015. This uptick occurs despite a decline in new listings and homes taking longer to sell due to high mortgage rates, which have now averaged 6.42%. Redfin's Homebuyer Demand Index reflects a 14% increase in demand from October lows, although pending home sales are down 31.8% year-over-year. Prices fell in 17 out of the 50 largest U.S. metros, indicating a shift in buyer behavior amid economic uncertainty.

Sales of luxury U.S. homes fell by 38.1% year over year for the three months ending November 30, 2022, marking the largest decline on record, according to Redfin. This drop outpaced the 31.4% decline in non-luxury home sales. Factors contributing to this decline include economic stress, high inflation, and a sagging stock market. Despite the downturn, there are early signs of renewed buyer interest as mortgage rates decrease. The supply of luxury homes for sale rose by 5.2%, the largest increase since 2016, while home-price growth slowed to 10%.

Redfin reports a slight revival in buyer interest as home prices and mortgage rates decline. The typical U.S. home price is now $352,000, down 10% from June's peak of $391,000. Mortgage rates have fallen to 6.27%, reducing monthly payments by nearly $300. However, sales have not yet increased, with pending home sales down 32.6% year-over-year. Notably, home prices in 14 major U.S. metros have decreased year-over-year, with significant declines recorded in cities like San Francisco and Phoenix.

Redfin reported a significant slowdown in the housing market for November 2022, with home sales falling 35.1% year-over-year, marking the steepest decline since 2012. The median home sale price rose only 2.6%, the lowest increase since May 2020. New listings dropped 28.4% year-over-year, while overall supply increased by 4.6%. Despite early signs of demand returning due to falling mortgage rates, total sales remain low. The average 30-year fixed mortgage rate was recorded at 6.81%, up 3.74 percentage points from last year, impacting buyer activity.

In October, all-cash home purchases in the U.S. reached 31.9%, marking the highest percentage since 2014, up from 29.9% a year prior. This increase is attributed to affluent buyers wanting to avoid high mortgage rates, currently above 6%. FHA loans also gained popularity, representing 14.6% of mortgaged sales, the highest in nearly two years. Notably, cash purchases surged in Riverside, CA (38%) and Cleveland (47%). Conversely, the Bay Area saw the lowest all-cash rates, at 14.3%.

Redfin reports that in the three months ending in November, 24.1% of homebuyers sought to relocate to a different metro area, matching a record high. Rising mortgage rates and inflation are impacting budgets, leading to a significant drop of over 30% in home sales year-over-year. Sacramento emerged as the top destination for relocation, while migration flows to popular areas like Las Vegas and Miami are decreasing. The trend reflects a shift towards more affordable locations as remote workers adjust to economic pressures.

Redfin's Homebuyer Demand Index has increased by 10% and mortgage-purchase applications have risen by 14% since October's lows. The decline in mortgage rates to 6.31% from a peak of 7.08% is driving this uptick, saving typical homebuyers over $200 monthly. However, year-over-year metrics indicate a significant drop in demand, with pending home sales down more than 30% and homes selling at the slowest rate in two years. The median home-sale price only rose 1.4%, the slowest growth since the pandemic started.